**India**: The Indian AI startup ecosystem is witnessing remarkable funding activities, with Bengaluru leading investments. Startups like SuperOps and Atomicwork are capitalising on real-world AI applications, attracting significant capital to innovate IT management and service platforms, signalling robust growth in the sector.
Artificial intelligence (AI) has swiftly emerged as a central focus for investors, particularly following the debut of OpenAI’s ChatGPT nearly three years ago. The industry has seen a surge in interest, driven by significant developments such as China’s DeepSeek and OpenAI’s ambitious $500 billion Stargate Project, which have intensified investor enthusiasm for AI startups.
In India, there is a notable shift towards practical applications of AI. Startups within the country are increasingly concentrating on real-world use cases, leveraging AI across enterprise IT solutions, platform-as-a-service (PaaS), and agentic AI. Recent reports suggest that the Indian AI startup ecosystem has experienced a whirlwind of funding activity, with approximately 65% of startups prioritising the development of AI applications.
According to a study by AI investment fund SenseAI Ventures, Indian AI startups raised $1.35 billion in funding during 2024, with Bengaluru accounting for nearly 40% of this investment. Companies focused on automating enterprise workflows and IT service management are attracting substantial capital. SuperOps, based in Chennai, for example, has successfully secured $25 million in Series C funding, underlining its unique use of agentic AI to enhance IT operations. CEO Arvind Parthiban detailed how SuperOps aims to integrate AI into IT management, stating, “What distinguishes SuperOps’ AI is our vision for an integrated, AI-powered workforce. We are not simply adding AI as an afterthought.”
Another startup, Atomicwork, which is supported by Khosla Ventures, recently raised $25 million in Series A funding. The company aims to serve all employees of an organisation through its agentic service management platform, a bold strategy as outlined by CEO Vijay Rayapati. He noted, “It’s a bold and ambitious mission… We’re building for every employee across the organisation.”
Moreover, TrueFoundry, a San Francisco-based company, has secured $19 million in Series A funding to advance its cloud-native platform designed to simplify machine learning training and deployment. Co-founder Anuraag Gutgutia highlighted the innovation behind TrueFoundry agent, which facilitates efficient autopilot-driven deployments by analysing logs and monitoring metrics in real time.
Despite the advancing AI landscape, SenseAI Ventures points out that foundational AI infrastructure startups constitute a mere 3% of India’s total startup landscape. These startups often emphasise diverse applications of AI rather than solely focusing on large language models (LLMs). Rayapati acknowledged that concentrating on AI applications is crucial for optimal resource utilisation and scalability, declaring, “Every startup claims to be an AI startup. But the reality is, 99% of us aren’t building models—and there’s really no reason to.”
Investors believe that India’s robust population presents a significant opportunity for growth in the AI services sector. Anant Vidur Puri from Bessemer Venture Partners remarked on the potential of India, stating, “For India, this opportunity is much larger. We’re a country of a billion and a half people, and if you take a 10 or a 30-year view, our population is a major asset.”
However, Puri cautioned against trying to replicate the higher-cost models seen in the US, emphasising the distinguishing features of India’s market. “India is not the US, and the US is not India. We can’t blindly copy or believe whatever works there will work here,” he stated.
Pranay Desai, Enterprise AI Partner at Z47, noted that AI products require significant consulting and adaptation efforts within enterprises, suggesting that leveraging service talent could present strategic advantages.
The driving optimism among investors is largely attributed to the accelerated evolution of AI technology and the maturity of early-stage startups focusing on application layers. Puri described how the funding cycle aligns with the typical transition from seed capital to Series A funding after a period of product refinement.
In this evolving landscape, Krishna Mehra from Elevation Capital highlighted the importance of qualitative validation at the seed stage, transitioning toward metrics in later funding rounds. He expressed expectation for agentic platforms to gain mainstream traction as founders develop robust data strategies.
Furthermore, Manav Garg, an investor at Together Fund, linked the funding surge to the scalability and accelerated revenue growth observed within early-stage AI enterprises. He explained that high growth rates, sometimes achieving significant annual recurring revenue in just months, indicate an emerging trend of AI adoption among enterprises.
The combination of these factors positions the Indian AI startup ecosystem for continued growth, with investors increasingly willing to back companies that demonstrate innovative applications of artificial intelligence in various sectors.
Source: Noah Wire Services
Subscribe to Industry Updates
